What are Financial planning and Tax planning

What are Financial planning and Tax planning
Everyone needs to plan for tomorrow. At every income level, there are steps you can take to make more efficient use of your assets and to ensure a secure financial future. It makes sense to develop well-defined goals and to map out appropriate strategies to turn your dreams into reality. Financial Planner helps in fulfilling your dreams.

What is Financial Planning?

Financial Planning is the process of meeting your life goals through the proper management of your finances. Life goals can include buying a house, saving for your child's higher education or planning for retirement. The Financial Planning Process consists of five steps that help you take a 'big picture' look at where you are currently. Using these five steps, you can work out where you are now, what you may need in the future and what you must do to reach your goals. The process involves gathering relevant financial information, setting life goals, examining your current financial status and coming up with a strategy or plan for how you can meet your goals given your current situation and future plans.

5 steps of financial planning

Build an emergency fund 
Eliminate Debt 
Employer Benefits 
Build a Budget 
Save 15% to 20% of Income

Some of the financial plans that make things happen are

Education Planner 
Goal Planner 
Wedding Planner 
Property Planner 
Retirement Planner

Basics of tax planning:

Investors need to grapple with tax issues year after year, and sometimes year-round, which makes it important to understand a few fundamentals that can make tax season a little less…taxing. 
Knowing your tax rate and how different types of income are taxed; understanding the role of tax-deferred accounts in your tax plan; being able to calculate the cost of investments correctly.These all can add up to a tax efficient investing strategy that helps you keep more of what you earn. 

5 steps of tax planning

Know your tax rate 
Invest tax-efficiently 
Use tax-advantaged retirement and education savings accounts 
Be aware of your “cost basis” and holding period in capital gains 
Get help when you need it

Goals of tax planning

Reduce your taxable income 
Increase your deductions 
Capitalize on tax credits 

A financial plan can put you in control so you stay on track regardless of what life throws at you saving and investing in the types of financial vehicles that are specially designed for your objectives.

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